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Harry works as a project manager for the NHQ project. His project has a budget of $2,208,456 and is scheduled to last for three years. His project is currently forty percent complete though it should be forty- five percent complete. In order to reach this point of the project, he has spent $725,000. Management needs a performance report regarding the NHQ project. Management is concerned that this project will be over budget upon completion. What is the estimate at completion for this project that Harry will need to report to management?
Correct Answer: C
Explanation/Reference: Explanation: The estimate at completion can be calculated by dividing the budget at completion by the cost performance index. Here, CPI =EV/AC = (0.40*2,208,456)/725000 = 1.21846 EAC = BAC/CPI = 2,208,456/1.21846 = 1,812,498 What is Estimate at Completion (EAC)? Estimate at Completion (EAC) is a field that displays the final cost of the project including the actual costs and the forecast of remaining costs based on the cost performance index (CPI) so far. The formula used to calculate this estimate is as follows: ACWP+(BAC-BCWP)/CPI